By Jeff Dorsch

The semiconductor test equipment market has changed dramatically in this century. Mobile devices have brought changes to the market, and their driving force is likely to impact the business for years to come. “Everyone on Earth has a smartphone or wants to buy one,” says Greg Smith, general manager of the Complex SoC unit at Teradyne. Different types of devices are being tested, and the number of leading automatic test equipment vendors has dwindled to three.

There are more customers requiring IC testers to have the “ability to log gigabits of data,” Smith says. “Customers are investing heavily in design-for-test technology.” Electronic design automation software tools are helping to “improve yield through design and test,” he notes. “We’re being asked to support design more than before.”

Steve Wigley, vice president of marketing at LTX-Credence, says data was always available to chipmakers and their ATE vendors, but “it wasn’t pulled together.” Now, “people are definitely focused on getting more data,” he says, while adding, “I’m not sure I would classify this as ‘big data.’ ”

Tom Morrow, SEMI’s chief marketing officer, sees “big data” technology having an impact on semiconductor test. “Basic statistical analysis is being done on all data,” he says. “It’s beyond pass/fail.” Chipmakers and their ATE vendors are “using more and more available data. It gets fed back into the test system for faster test times,” Morrow adds. Big-data analytics, he notes, helps answer the question, “How do I use this big iron?”

While the data sets may be bigger, the number of major players in semiconductor ATE has narrowed in recent years to Advantest and Teradyne. LTX-Credence trails as a much smaller third player, and many suppliers of specialty test equipment follow this triad. The ATE market is “mature, consolidated,” Morrow says, with Advantest acquiring Verigy in 2011, LTX and Credence Systems merging in 2008, and Teradyne buying Eagle Test Systems in 2008.

Teradyne’s Smith says the chip-testing market competition is chiefly between Teradyne and Advantest, with those two vendors commanding 85 percent of the market. “LTX-Credence is the largest of the rest,” he comments. Yokogawa Electric also stands out in the ATE pack, Smith says.

“We definitely see strong competition in linear and power management test from LTX,” Smith says. “Not to be disrespectful, but they are not as strong in complex SoC (test).”

Wigley acknowledges that Advantest and Teradyne are the big dogs in ATE, at least as measured in sales volume. “There are the big two, then ourselves, then regional players,” he says. LTX-Credence’s competitive advantage is that “we don’t try to be all things to all people,” Wigley adds.

Device Trends

The year 2013 has marked “the resurgence of microcontroller test,” Smith observes. Teradyne has “very strong share in microcontrollers, image sensors, and linear ICs,” he says. Smith adds, “Our major competitor,” (meaning Advantest) mostly plays in the “CMOS space,” handling a wide variety of devices.

“Very complex devices are being produced in greater volume than ever before,” Smith says.

The leading trend in semiconductor ATE, Wigley says, is “the ubiquity of RF” – radio-frequency devices. With microcontrollers, he adds, “we see RF requirements coming out of companies in that space.” The “Internet of Things,” where more and more electronic products are connecting to the Internet, is becoming a driver in this trend, Wigley notes. “These are consumer-oriented devices, RF-enabled, and designed to gather data,” he says.

The semiconductor industry was once “focused on tech specifications” in ATE, according to Wigley. Now, “the challenges are much more cost-focused.” Chipmakers want to “make the test cell more productive,” he says. “Life cycles of the (chip) product seem shorter now.”

Equipment Market Trends

Equipment for final testing of devices is moving beyond testing microprocessors and other widely used parts, SEMI’s Morrow notes. Light-emitting diodes and microelectromechanical system devices are emerging as critical parts that need testing, he says. Meanwhile, metrology is imposing “new test requirements,” he adds. “Metrology systems haven’t been part of semiconductor testing in the past.”

Not including memory testers, Wigley estimates the semiconductor test equipment market will be worth $2 billion to $2.1 billion this year. He sees the market shaping up as “roughly the same as last year, maybe 5 percent to 10 percent better.”

Smith says, “This year is shaping up about the same as last year,” although with “a very different profile.” He notes, “2012 started strong and weakened as the year went on. It continued into the first quarter (of 2013).” Smith adds that semiconductor test equipment sales last year were “very, very strongly driven by the mobile area.”

For the long-term perspective, the Teradyne executive sees mobile devices continuing to dominate electronics and semiconductors in the near future. “Smartphones and tablets will continue (to drive ATE sales) for the next two to three years,” Smith says.

LTX-Credence’s Wigley says, “Our experience is from a market point of view. There’s going to be ups and downs.” He predicts “relatively flat revenues” for the ATE market and “huge efforts to improve the backend of the (fab) line.”

SEMI’s Morrow anticipates a flurry of ATE-related activity at this year’s SEMICON West. Advantest will have “a lot of new product announcements,” he says. There’s also the TestVision 2020 workshop which concludes Thursday at the Marriott Marquis Hotel, and a TechXPOT session devoted to semiconductor test to be held Tuesday afternoon in Moscone Center’s North Hall.

All in all, the only thing you can count on being constant in the semiconductor test business is change. Those who adapt to changes in business and technology will prosper and thrive.